CAPL Company Profile

On October 1, 2014, CST completed the GP Purchase and IDR Purchase for $17 million in cash and approximately 2 million shares of CST common stock for aggregate consideration of approximately $90 million. On August 21, 2016, CST, the owner of our General Partner, entered into the Merger Agreement. As a result, Circle K Stores Inc., a subsidiary of Couche-Tard, will, through its acquisition of CST, control CST’s interest in the General Partner and CST’s 19.8% limited partner interest in CrossAmerica as well as all of the IDRs. The Merger was approved by CST’s stockholders on November 16, 2016 and is subject to the receipt of regulatory approvals in the United States and Canada. The Merger is currently expected to close in the second quarter of 2017. The General Partner manages the operations and activities of CrossAmerica. The General Partner is managed and operated by the Board and executive officers of the General Partner. As a result of the GP Purchase, CST controls the General Partner and has the right to appoint all members of the Board. Therefore, CST controls the operations and activities of CrossAmerica even though CST does not own a majority of our outstanding limited partner units.

We conduct our business through two operating segments, Wholesale and Retail. As of December 31, 2016, we distributed motor fuel to nearly 1,200 sites located in 29 states (Arizona, Arkansas, Colorado, Delaware, Florida, Georgia, Illinois, Indiana, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, New Hampshire, New Jersey, New Mexico, New York, North Carolina, Ohio, Pennsylvania, Rhode Island, South Dakota, Tennessee, Texas, Virginia, West Virginia and Wisconsin).

We are one of the ten largest independent distributors by volume in the United States for ExxonMobil, BP and Motiva (Shell), and we also distribute Chevron, Sunoco, Valero, Gulf, Citgo, Marathon and Phillips 66-branded motor fuels (approximately 83% of the motor fuel we distributed during 2016 was branded). We receive a fixed mark-up per gallon on approximately 87% of gallons sold to our customers. The remaining gallons are primarily DTW priced contracts with our customers. These contracts provide for variable, market based pricing. An increase in DTW gross profit results from the acquisition cost of wholesale motor fuel declining at a faster rate as compared to the rate retail motor fuel prices decline. Conversely, our DTW motor fuel gross profit declines when the cost of wholesale motor fuel increases at a faster rate as compared to the rate retail motor fuel prices increase.

We own or lease and operate retail sites. Subsequent to an acquisition, we evaluate the eventual long-term operation of each retail site acquired: (a) to be converted into a lessee dealer or (b) other strategic alternatives, including divestiture or longer term operation as a retail site. By converting retail sites into lessee dealers, we continue to benefit from motor fuel distribution volumes as well as rental income from lease or sublease arrangements while reducing operating expenses. For the year ended December 31, 2016, we converted 77 company operated retail sites in our Retail segment to lessee dealers in our Wholesale segment.